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John Mackey Education. (2013) 'Conscious Capitalism.'

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United States 5, Us 4, Milton Friedman 2, Milton 2, John Mackey 2, D.c. 1, Singapore 1, Selfish 1, Oliver 1, Austin 1, Japan 1, Hong Kong 1, Roger 1, George Gilder 1, Ben 1, John 1, Tom Pete 1, Freedman 1, Hollywood 1, Hairs John Mackey 1,
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  CSPAN    Book TV After Words    John Mackey  Education.   
   (2013) 'Conscious Capitalism.'  

    February 17, 2013
    12:00 - 1:00pm EST  

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question. the interesting question you raised, what are the circumstances under which societies manage resources and under what circumstances do they overexploited resources as we do today? to sum up in one or two sentences, most nontraditional societies are much more likely to take good care and manage their resources under two conditions. first they could exclude outsiders can be the only ones themselves utilizing resources and secondly if that confidence they would pass on resources to their own children. to pass on their own children if they were sure they would keep outsiders out, then they would take good care of the resources i'm aware if they couldn't exclude outsiders and if they were not passing on resources to their kids, then they reasoned correctly. when will chop the tree does sue
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ms will do it also. that's a good note on which to end. [applause] [inaudible conversations]
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>> at nights, "after words" with "the wall street journal." capitalism doesn't have to be a zero-sum game in which some win at the expense of others. he highlights the practices of companies like whole foods and southwest 50 to increase value for shareholders by creating value for their customers and employees as well.
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it's about an hour. >> host: john, a delight to see you again. let's set the stage. some people will pick up this book and see the title and think here we go, another guy who doesn't like capitalism, who has a lot of criticisms of it. he made many a ceo, probably feeling guilty. the fact you are a ferocious capitalist and what is to me if he weren't necessarily borne out by a cup of butter somewhat convert any talk in the book about your younger life self-described progressive. be living in a housing co-op, start a business and i'll just quote you, if you embrace the ideology that they're essentially evil because they sought only profits.
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the next thing we know, you're reading frederick hayek and milton friedman and then we have whole foods. talk about that conversion, what you learn from your early experience in how you came to a point where writing a book, not just calling capitalism and heroic enterprise, but the ways you want to defend and improve it. >> guest: first thing to understand is that very idealistic and i'm a great believer in capitalism. i think business is heroic. it has lifted humanity out of the dirt and some statistics we discovered as we researched the book was a couple hundred years ago 85% of the people live on less than $1 the day. today that some 16%. a literacy rates across the planet for over 90%. today they're down for 19%.
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78 in the united states, 80 in japan. humanity is made great progress, so we are great believers in the business has been able to do. it is the good guy. i went to the university of texas at austin and that's a pretty progressive sydney and i didn't study business. i studied philosophy and religion and world literature and history and pretty much inanities. when i started the business side of background in economics or business or anything, but i knew i was going to have really low prices would be a different kind of business because it wasn't going to be like those other businesses. once you get into the real world companies got to pay her bills
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and you're undercapitalized. your philosophy of business can evolve. is interesting because a lot of my friends saw me as a traitor that i gone over to the dark side. and you come in business was struggling. they manage to lose 50% of capital the first year. start with $45,000 every day, micro-finance a time and were only making $200 a month each, way below minimum wage even back then. so i just began to move away from that philosophy. as i was trying to figure business, i read hundreds of business books. to try to understand how to make the business successful. at the same time, somehow i stumbled on to keep all and
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george gilder and dozens and dozens of other thinkers and realize that their explanations for how the economy working society worked made more sense than a half-baked philosophy i had to a so-called progressive. so i've been in that philosophy. it didn't work and in the real world was proved to be very. so that's how i got started on it. it's not so much economics taught me to become a better business person so much as they just gave me a worldview that made sense of a business is actually doing what i was doing us a business person. >> host: you come to capitalism and no now understand these ideas like exchange and profit and help society. what is conscious capitalism and how does it differ from many of
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us would call plain old wonderful capitalism? >> guest: first thing is we think business is great value, but it can be better. it has greater potential ben's been realized. when you understand the gallup poll that shows big business in the united states has an approval rating of 19%, 81% don't approve of business. even congress is at 17%, which is about the same level. you realize people have less confidence in business. a narrative about business and capitalism has been controlled are the enemies of business and capitalism. if you study history, you'll see businesspeople have always been held in disdain.
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a lot of business wasn't done by the elites. the elites who are both common trade and business system that often fell in the shoulders of minorities, such as in the west jewish and that use cheney's who through hard work and enterprise often times made a success of their life and make money and created men being and persecution. one country after another supposedly because of religion and contributed to it. a big part of it was the economically very successful and that was sustained by the intellectuals. the intellectuals have always hated business. we can get into why that might be the case if it serves a useful purpose, but it's most important to us intellectuals are not friends of business. not in the past and certainly not today. so businesses painted as
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fundamentally all about money. selfish, greedy, explicative can only exist to make money. i think if you go to a cocktail party en masse somebody randomly, with the purpose of this as? people will give you an ibook because though probably say what's the purpose of business? the purpose of business is to make money. but that's an odd answer because if you ask a doctor with their purposes, they are well compensated and also need to make money, but won't say my purpose is to make money. a doctor heals people. teachers educate, architect designed buildings, engineers constructing spirit journalists hopefully help uncover the truth. they have a higher purpose of discovering what's hidden away and get a good, interesting story that hopefully is a truthful story.
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so professions refer back to some higher purpose it serves other people. it creates value for other people. businesses the greatest value creator of the world. it creates goods and services that make our lives better. it's not a zero-sum game or some of the winds and somebody else loses. business great site for customers, employees, suppliers, investors and the communities that is part of. all of that is done through voluntary exchange. business as fundamentally good and as a point in the book has the great potential to be heroic in terms of lifting humanity up to a higher level. >> host: you talking about doing that by having purpose like you said at the example you gave. what are some of the aspects of conscious capital? >> guest: we identified four
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key tenets of conscious capitalism. all four are somewhat interdependent. they also do work together in a synergistic fashion. the first on his business has potential for a higher purpose beyond making money. it's not that there's anything wrong. one of the things business does is creates all you for investor stakeholders. just as my body produces red hotels and if i start producing red cells, i'm going to die. the purpose is not to produce red blood cells. business cannot exist if it's not profitable. it will not have the capital to bring in bring in itself, and it equipment when it works out, respond to competition. profit is essential to business. every business has potential for a more transcendent purpose beyond that, just as other professions do. first business has to discover
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or rediscover his higher purpose. most entrepreneurs who create business in the first race i motivated by some type of higher purpose. they may not be conscious of it. they may not be explicit. only few exceptions. and i started a business because they were on fire about something. there was something they wanted to create them with indifference they wanted to make in the world. another reason not to show they could do it. it's only later when a business matures that the economists come in and interpret that it's all about making money. the second time in the conscious capitalism is that the stakeholder system that it's not just about creating value for the investors. other stakeholders also matter and they are interdependent upon
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another. customers matter, employees matter come suppliers matter, and so do the investors. if the example i used as a retailer that explains this is no whole foods market we try to hire the best people we can find, make sure they are well trained and management's job is to help them flourish in the work place, give them tools they need to make sure they are happy because they are the ones that serve customers. happy team members serve and create happy customers and happy customers happy investors. saw the stakeholders are interdependent. whole foods market has about 100,000 suppliers we do business with around the world and it is essential they also flourish and create a competitive advantage
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and unique products and services to make whole foods market stand out in the marketplace. supporting suppliers also flourish. once you realize the business is inviting is creating diagnostically investors. but all the stakeholders are and have you as a system and begin to ask questions such as what strategies can we do in our business that allowed oliver stakeholders to simultaneously flourish and prosper? >> host: what are things you do at whole foods to do that? >> guest: the more important question might be, what do you do that might not result in creating the win-win scenarios. this might be strategies for one stakeholder is gaining another is losing, which you may seem business was likely to get profits up, so we're going to
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raise prices, cut wages, cut benefits and grander suppliers down and that will result in higher profit. the benefits of negative feedback loops. they began to go to competitors. wages are low, benefits and is good, so please take jobs away with other companies. suppliers don't have to trade with you and if you cram them down, though eventually face you out or deemphasize you as a customer. so they are all connected together in the strategy you have to do is how do we create value subdural simultaneously winning? i'll give you an example that often times people think might be a trade-off. we created the notion, which does microcredit loans all around the world in developing countries. the review projects in the community's trading, such as a project in costa rica, bananas,
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mangoes, coffee so will be looking for were doing business. some of you might say they're being philanthropic with investors money. that's the type of theft. you should be philanthropic overthrown money. the narrow sense a concerted make that case it doesn't create value for the investors. but we found is it's creating value for stakeholders. our customers market within our stories and tell her customers what they're doing. one theory to the prosperity campaign that variable to donate change to this process together $5 million for pennies and nickels and dimes left over from peoples change and our customers therefore and market to it
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online and we received hundreds and hundreds of letters enthusiastic about what coplanar foundation is doing how poverty. team members participate partly through payroll deduction if they wish and also a volunteer program for team members can volunteer in countries that were doing the microcredit and it's a transformative experience for many of them. in fact, there's nothing our company assigned to this raise morale higher pay people are so proud of at whole foods is done. in eight years the party hoped over a million people. 93% are women to have better lives. our suppliers are also able to participate in that. they contribute money to the whole planet foundation of the advertised markets in our stores is the supplier alliance that gives them greater exposure, so that is a win to participate.
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is it good for investors? absolutely. we received millions, tens of millions of dollars of positive publicity and goodwill in our communities that have helped whole foods market brand to be better known and established throughout the world and as a result the investors gain as well. you say when win-win strategy. >> host: some people might ask at whole foods is unique when you talk about purpose. there is a certain mention, but you laid out in the book and it's something you have in your source, in which her goal is to give people choices for healthier eating. there's a number of things. i don't mean this dismissively, but a missionary deal to the idea behind your company. can every company do this? for instance, if you are the worlds largest creator of washing machine part, can you
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really have a higher purpose of the wearer in orient your company around these big ideas that we whole foods can? >> guest: well, my first point of that is grocery retailing is about a mundane of businesses with god. the fact we find a higher purpose, if grocery can almost anybody can. your example of washing machine parts, how washing machines have liberated us that women from directory and washing clothes in rivers and streams in reading them against rocks is time-consuming and perhaps not the best use of peoples attention and time. washing machines themselves have been a great technological advance for humanity.
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if you're making parts of the economy are higher purpose should have tell and create the best washing machines for the most affordable washing machines that can reach the widest market possible. you're actually contributing to the advancement of humanity and i think you should see it that way and marketed that way. you can always find exceptional cases where somebody is doing a product is actually deeply harmful for people. so i'm not i'm not saying this is applicable to every test, but more than 99.9%. >> let's talk about what this is not because some people will look at the title of this book and if they haven't radek, their first that if this an explanation or a case for corporate responsibility. you are clear in the book that is not what this is about to
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become this is corporate social responsibility come in this tc at this using pension funds or using proxies to push companies to change policies. often environmental policies or labor policies in ways that these groups are socially responsible thing to do. what is different between that movement from what you're advocating here? because you talk about how companies need to do what is right. that is a part of this argument. >> most people who first hear about this, people don't like the categories in their mind. they think this is just another version of that. it's not. it's a whole new paradigm for thinking about business. it doesn't fit within that box very well. early on in the book we make important to differentiate cost of capitalism and the biggest
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difference is corporate social responsibility is just a traditional business profit centered model that grasps on some type of social responsibility because they think it's going to appease the critics. corporate social responsibility departments inevitably reports or public relations or marketing. they are seen as a way to improve the brand reputation of the company. they oftentimes accused of greenwashing and you're just doing this for reputation purposes. it's not really -- it's very thing it is not very deep. conscious capitalism makes the community stakeholder and environmental stakeholder key major stakeholders in the organization to create value for a part of a unique set of your higher purpose, part of her mission to do those things.
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these are not grafted at cons to make you look better. they are the essence of who you are. to talk about their socially responsible or not it's almost a silly question. inherently they are creating value for customers, employees, value for suppliers creating value for investors and almost without exception cautiously trying to create value for the communities they are partners. even if they don't try to create value for their communities per se, the fact they creepily for customers, employees, suppliers and investors is inherently social responsible. if this doesn't to redeem itself as if it somehow either bad or evil or ethically neutral can do is do good works to regain itself.
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business is inherently good if it's creating value for all the stakeholders. we think you can go beyond that to consciously create value for communities as part of what your purpose and mission is. >> host: you talk about how business is inherently good. it's interesting because it partly a story at whole foods, print an explanation of philosophy, partly a how-to guide for some companies they may want to try this. talking about business being inherently good, you didn't mention the book the fact this is more necessary than ever because business has got a bad rap, especially after the two guys in a financial crisis. one of your points in here is business to do a great deal to help itself if it were acting more in a way like this in the setting an example. i was curious but also you think the role of ceo is in talking of capitalism in defending capitalism is.
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you talk about the role of government sometimes and how it works against business. d.c. has everyone talking about in defending capitalism the next painting it to people? or is it something you purely do by example? >> one of the most disturbing statistics for me is that for the longest period of time, you have to understand history of the united states started out really poor. we were a backwater for united states. really if they embraced capitalism in the united states, where tens of millions of immigrants come to create a better life because they had more freedom. they have the freedom to enterprise, to start businesses and for the longest period of time, the united states is the freest nation in the world in
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terms of economic freedom. a shorter period of time ago was the year 2000, for example, the united states still ranked number three in economic freedom index behind hong kong and singapore. so we went number one anymore, the worst of number three against pretty dynamic economies. over the last 13 years has now dropped to number 18. when people ask what's wrong with the economy, why do we have such high unemployment, why has disposable income per capita basis declining and has over the last 10 years? the answer to me it's right there. we are less economically free today than we were 13 years ago and is our economic freedom declines, taxes increase, the
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engine that is the basis for prosperity, which is businesses lesson and prosperity is therefore declining as well. economic freedom goes down, so does prosperity. so if the capitalist -- business people are going to speak a, we can expect economic freedom to continue to lesson in american prosperity will continue to happen as well. we are far from being in a free enterprise capital system anymore. we've got a government, big business colluding with each other. a great example is the fiscal cliff hill that is just past and what you see as payouts for politically well-connected organizations such as hollywood, alternative energy, but all kinds of special deals being cut and we're moving away from a
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system where people think it's fair and this is a system where you can get ahead through hard work and enterprise to one where people think the way to get ahead is to be politically and that's a real problem. >> host: is government intrusion get in the way of this type of philosophy conscious capitalism? you talk about the need for businesses to not even be holistic, but long-term message about not hitting quarterly targets, the bigger object as they have and how they roll out over a longer time horizon. a lot of businesses save names and john mackey says that, but the reality is sec rules make it hard to have transparent discussion and see what rethinking and wait in the waiting of trial lawyers. their argument would ears a lot
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of cultural aspects that are in place, that work against thinking this way. .. we've allowed government to increase to such a large scale,
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the people has, our society has, because we want government to protect us from these sociopaths. as long as you see corporations as primarily sociopathic, the rationale from government to protect is from the sociopath is compelling. so business itself has to discover its higher purpose and act in a different way and improve that overall rating to get it up to 90% rating, and then the press for regulation to control us and protect us from the sociopathic corporations will lessen because it will be self-regulating and self-policing. so i sort of blame business for falling into the influence of the critic and acting in ways that are detrimental to their long-term best interests. >> host: do you think someone who lives in washington, writes about politics, if 1 been% of businesses were today part of the conscious capitalist movement, this president, wouldn't have introduced this
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healthcare bill and all its regulations? >> guest: i doubt this president would have elected. >> host: interesting thought. i also want to ask in terms of impediments to doing something like this. you have thought deeply about this for a wrong time, and whole foods has had elements of your philosophy in it from the beginning of its creation. what do you say to companies who would okay, look, if i were starting out, fabulous, i would love to do something like this. but there's simply no way in my business right now, with the unions, with contracts i have, with the regulations i already have on my business, to rear orient dismiss, re-align my purpose and align my stakeholders. how do you do that? >> guest: there's no question it's a lot easier to start a conscious business than to
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transition to one if you have a long legacy and a strong culture. it will certainly take visionary ceos and leadership to make that transition. but it's money opinion that the conscious companies are going to dominate the 21st under landscape. for one simple reason. it works a lot better. a better way to do business. not just because it's ethically better. just wins in the market place. we need a lot more research to prove the point but we start in appendix a how these conscious businesses have outprooferred the indies sees notly a little but by a lot. the has 15 years they have outperformed the s&p 500 by 10x over a 15-year period. >> host: do they outperform someone lining an oil company? >> guest: well, oil companies potentially can be conscious as well.
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and, again, oil is one of the key energies that helped humanity get lifted out of the dirt. so there's nothing inherently bad or evil about oil companies. and they need to take their environmental concerns seriously, but they can create value for their customers, employees, suppliers, and they can have a higher purpose. so there's nothing that disqualifies them as potentially being a conscious business. so, what happens in capitalism is whatever works better ultimately wins in the market place, and if it doesn't work better, it doesn't matter whether it sounds good or not. i won't triumph in the marketplace. we're saying that this type of philosophy is going to try new hampshire in the marketplace so companies will either begin to transition to a more conscious way of being or they're going to feel, go out of business, which new, young, entrepreneurial
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companies will take their place. many of the companies we most admire, for example, now, they didn't exist 15, 20 years ago. certainly not 30 or 40 years ago. these are the companies that changed our lives. going didn't exist. facebook didn't exist ten years ago. it's phenomenal, and the whole internet phenomenon is less than 25 years of age. so there's no amazon.com. the legacy companies will have to evolve or they will be outcompeted in the marketplace. it's that simple. not tomorrow but in ten years, we'll be in a very different landscape in 20 -- i'd like to revisit this conversation in a decade. >> host: that's a deal. i should point out there's a think tank, not for profit, called conscious capitalism.com, and expand on that. there are members, do ceos
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belong to it? designed to help people figure out to do it? >> guest: capitalism.org. it is a nonprofit organization, and we have a couple of conferences a year. we do one for ceos that is more sea level conference, a little smaller, more elite kind of gathering. we're going to do something in san francisco april 5th and 6th, which we're hoping to get a couple thousand people to that event, where we can gwen spread -- we can begin to spread these ideas. our society is in decline and unless re rediscover a higher purpose, as companies and businesses and thinking about the greater good of all the stakeholders, that decline is going to continue. we're going to see more and more government intrusions, less and less of a free society, and i love our country so i feel like
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i want to do what i can do to reverse that. >> host: i have to ask you -- you mention this in the book. a lot of this you talk about not just aligning stakeholders and having a purpose, you talk about conscious leadership and a conscious culture within the company. and a lot of it was very uplifting. talking about ceos needing to have more integrity, more trust, transparency. you talk about love in the workplace, the need for love in the workplace, and you can get done with this and feel inspired. i have to ask how that -- a lot of people will wonder how that mesheses with one of the things they may know you for, which was this event a while ago where the sec was looking into you because you were posting on yahoo against a competitor, under an anonymous name. some people might say how do you write below out those things and reconcile it with that event?
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and since you bring it up in the book i want to ask you about it now. >> guest: you know, i may be the only person in the world that doesn't see this as a contradiction. i don't see it as this big deal. the media sensationalized what happened, and because i was under investigation by the sec -- >> host: which was dropped. >> guest: which was dropped. i wasn't able to defend myself. i couldn't write. i couldn't do an interview. i couldn't post on my blog. i couldn't do videos. i had to remain silent. so, the whole thing was sensationalized and it was a smear. still, obviously, dealing with it in a sense because i get asked that question all the time. let me respond. first of all, what i said over an eight-year period, install the public record. anybody can still go on yahoo, do a search, and you can see all the -- i'm not ashamed of what i wrote. i'm actually proud of what i wrote. i wrote very intelligent, thoughtful postings there, and
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as part of the anonymous thing, that's so blown out of proportion. people who are not familiar with how financial bull -- bull continue boards work, when you go to a masquerade party at halloween, you're in costume. so is everybody else. are you deceiving people when you do that? are you trying to pretend you're not kim in the cost stomach. >> guest: obviously not. that the custom of the party. glory costume. so is everyone else. when you go on a financial bulletinboard and you post, you take a screen name on. everybody does. people don't post under their, quote, real names. not trying to deceive i anyone. at it like in a masquerade party. you're an anonymous person, which is a good thing. that allows the power of the ideas to triumph. now, in terms of rubbing down a competitor, over an eight-year period and 1400 posts i probably had a does or so that were critical of while oat -- wild
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oats. they were taken out of cop text and repeated over and over again. i criticizedded whole foods from time to time as well. and for me, it's hard for people to understand but i was julie -- it was a form of play. i had no diabolical motive here. or trying to drive the stock price down. as of a poster could affect markets. nobody paid any attention. how many people actually read the posts? it was a community of a few hundred people at most. and we were just debating, because i like to argue. i like to debate. i like the repartee of ideas. yes, i defended whole foodded market and i occasionally criticizedded wild oats, but not as a smear, as if i was trying to drive down the stock price while we were trying to acquire it. that is such nonsense a., because i had not posted on the
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bulletin board for eight months, and second, an anonymous post doesn't affect markets, and never heard anybody's stock -- never hurt anybody's stock price. so i was having fun. i'm a very playful guy, and i enjoyed that debate about the subject that i am most passionate about in the world, which is whole foods market. most of my postings were about whole foods, usually defending the company about the shorts telling lies about the company and i would take my sword of truth, win what i could disclose as a public company, and basically defend whole foods from the record. it's fun. in hindsight, if i had known anyone would care i would not have done it. so. so i learned a valuable lesson. i challenged viewers to read. >> host: let's debate about this bigger idea. there's no question there's
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going to be a debate about this notion. you've already had it. since 2008 you have had a lot of different ideas coming out about how business should restore itself. you're not alone in this. there's been different talks about different forms of company. the triple bottom line. benefit corporations, different ideas how to improve capitalism. and of course the classical economists say capitalism doesn't need to be improved. i went back to something you d -- you had a fascinating debate in 2005 with milton friedman of all people. it was incredibly thoughtful exchange. he made the point, said, look, capitalism, when it is oriented -- the great beauty of capitalism, when it's oriented
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around profit maximize. >> everybody does win. the argument is if you're a company and you're doing your job the right way, customers are getting great products and they're willing to pay you for them. your suppliers are getting their products sold. your investors are making a return on their money. your employees are happy because your business is growing and there's opportunities for advancement and greater pay. and what is wonderful is this is simple. at it one idea opened around which everyone can unite ask agree. and then of course there are all the side benefits, which you mention in the book, too that go to society, everyone is allowed to use the money they've made from this venture to improve society as a whole, through their own different decisions and get better his rays and better health and less poverty, all this stuff. i think the argument, classical economickists make, if the argument is businesses need to
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do what is right, what you think i right may be very different from what think is right. you have now invested this whole aspect of kind of judgment and all these questions into this that gets it away from the simplicity of profit maximization, and that could get in the way of it. what would be the response? >> guest: i have a number of responses. first of all, the paradigm you just articulated has held sway for decades now. and business' reputation is 1%. it's seep as greedy and selfish and exploitative and only caring about money. so my first response is, simply from a market standpoint, if you want to promote capitalism, you're going about it with a bad strategy. you're not winning the argument. you're losing the argument. you're playing into the hands of the enemies and the critics. you're reinforcing exactly what they believe, that all you care before the is money. you don't care about anything else.
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so that my first response. my second response is that i call it the profit paradox. and i use an analogy to complaint, which is happiness. if you want to be happy in life, most people do, what i've discovered in my -- as i've gotten older and more mature, the absolute worst strategy to achieve happiness in life is to make that your primary goal. if you make happiness actually what you're striving for, you will not probably achieve it. instead you will be sort of narcissistic. self-involved. caring about your own pleasures and your own satisfactions in life as your paramount goal. what i've found is that happiness is best thought of as a byproduct of other things. a byproduct of meaningful work. and family. and friends. and good health, and love, and
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care. we get happiness not by aiming directly for it but by throwing ourselves into life projects, involving ourselves in fundamentally trying to have integrity and be a good person, and if we do those things, happiness will be one of the things that comes as a result of that. i've never aimed for happiness in my life but i'm very happy person. it's come as a byproduct of other things. profits are similar. if you make them your primary goal, you've said ita lines the stakeholds are, but it does just the opposite. if people think that you're in it for just your own self-interest, and that the shareholders are in it for their own self-interest. there's no higher purpose that unites the stakeholders, then what is to keep everyone from taking their own short-term interest into play. the customers will look for what its best for them and only what is best for them. they don't care about the organization or your store. and if it's in their best interests to shoplift and get away with it, why wouldn't they
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do it? if you're employee, why work hard if they can get away with shreking, and if everybody is looking for profit, you're not going to get the alignment. everybody is simply look out for their own personal profits. instead what will unite peel is a more transcendent purpose that will align the stakeholders, and of course they're self-about bud not exclusively self-interested. you cannot create a great society on the basis of your own personal self-interest. we're a lot more complex than that. we also love, we also care, we also are ideaityic, we follow values and that is what leads to both the good society and happiness, is to go ahead and go
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of the good, the true, the beautiful, the heroic, throw yourself into met -- metabolizing those higher values and your business with flourish. you can't get there by putting the cart before the horse. i'd love could tom pete against business that are think that way. they're not going to beat whole food. >> friedman says john mackey and i agree on most of it but he makes it sound nicer than i do. his argument not that debate was, yeah, of course the company wants its boston employees to be happy, and of course the company wants a higher purpose, but actually the reason for doing although thing is is because when you do them well you make more profits. >> that's the investor's perspective. if you take the perspective of the other stakeholders, they see
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it differently. >> host: so this isn't just marketing. >> guest: it's not just marketing. in the -- milton -- freedman was talking about that -- part of my response is -- i think i might have said something in the debate i had with him -- milton, then say it. if you say it's about creating value for the other stakeholders, then say that, too. don't just say, it's strictly about creating -- at least misunderstand examination attacks and plays into the enemy's arms. in fact, business is the greatest value creator in the history of the world. capitalism is the greatest form of social cooperation ever. let's tell that story. let tell the story about all the value we create, not just for the investors but for all the other stakeholders as well. it's partly just better branding and marketing, but it also is a revolution in the way we think about it. we start thinking about the good
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of all of these stakeholders and not just our own personal good or the good of the investors. it's a more robust, just a bigger picture about what business is all about and of course we have to create value for invetsors as well and you shouldn't suboptimize the value creation for investors, and i argue that the way we're putting this forward is a better way to create more value for investors as well. when you put the investors first, like happiness, you're probably going to suboptimize happiness and value creation. >> host: aren't there necessary tradeoffs and limits? we talked about this in a different form before. so, whole foods' higher purpose is giving people choices to eat better. you talk about what you view that as being, largely a plant-based diet, for instance. you yourself are a vegan, you have made the point, and a lot of people have, that livestock raising around the world takes a
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toll on the environment, et cetera. and, yet you sell meat in whole foods stores, and we talked about, some people would say -- outside people would say, hairs john mackey talking about how we have to do the right thing and this and on the other side he is chasing profits. how do you put those two things together? >> guest: perfection is not one of the options we have, and i don't think it's so much as tradeoffs as i often times say if you look for tradeoff, you'll find tradeoffs. that's the way the analytical mind works. it picks things apart and finds the tradeoff. i always say when you find tradeoff in business, it's a failure of imagination, failure of creativity that hasn't yet found the win-win strategy. the example that you use, the reality of the fact is that we're in business to serve our customers, and our customer --
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if we're not prepared to sell them the food they want to buy -- it's not so much we're chasing profits. we're trying to create value for our customers, and they're the ones that decide what is valuable to them. we have a responsibility to try to educate them, to try to influence them to make different choices, but the end of the day we in businesses serve them, and they decide what it a value to them. we don't decide that for them. i want want to live in a society where so-called experts are making decisions for everybody, what is good for everybody else, and i don't like the way our osite is drifting in that direction. think people are responsible for themselves. they're accountable for their own choices, but they should have the freedom to make their open choices, and business ultimately serves its customers, and if you ever forget that you're going to fail as a business. that being said, i use an example. when whole foods got started we only sold 5% of our total sales
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were in organic foods. now 30 plus years later we're up to close to 50%. that's through educating our customer base over 35 years, we also trying to educate our customers' healthy diet and healthy eating, and it's not easy. people deal with food addictions. not like they can shift overnight. burt over time we're educating people make different choices. i would look nothing better than the customers to vote the less healthy stuff out of the store because they stop buying it. but until they do that, near business to serve them. >> host: let me ask you about that. you talked about food addiction. one thing that struck me in the book, and i'm dying for you to explain this. you talk in the become eloquently about in the beginning when you're talking about capitalism, voluntary one of the win-wins of capitalism: something people need and the company provided and everyone
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benefits. later in book you nonetheless are very critical of some companies who you simply do not think are doing the right thing and they exist to provide products to people that you think are unhealthy and you talk about tobacco companies, and junk food companies. what's interesting to me, this is something that you care very deeply about you, because it's an aspect of your life that you are devoted to making sure that -- trying tone courage people to eat more healthily, and you think these companies are some way not right. the only problem i have with this -- this is what i'd like you to explain -- is that right is, of course, always in the eye of the beholder, and i can five ann activists who think oil candidate are not right because they mountain the company, and five mothers who think nickelodeon should be shut done because they don't like the
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programming. and five ardent filmis who think mattel could be -- >> guest: you could eliminate every business. >> host: then huh to be undermine the idea of voluntary exchange? >> guest: we don't suggest in the book that tobacco companies should be made illegal or that junk food companies should be forbidden to trade. business there is to satisfy the needs and desires of its customer base. fastfood companies, for example, they have served to its historically useful purpose. they have been overindulged in but they provide convenience, consistency, and affordable for many people. where those are things that people prefer. so, the challenge, if i was running a fast-food company,
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would be, okay, how do we provide affordability, convenience, and quality and consistency while upgrading and educating our customers to make choices that will be healthier for them. even a fast-food company like that can begin to nudge its customer base, not command them to do so, but can help over time raise consciousness, and i think in a sense they have a responsibility to do so. the tobacco industry is a tougher case. >> host: can they be a conscious capitalist company? sunny think they could if you look historically in the way tobacco was thought about for a long time, as that tobacco was something that calmed people, helped them concentrate, helped them relax. so, i think the challenge for tobacco companies is, is there a way to evolve their products over time to keep the good qualities that people seek out when they use the products,
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without the damaging impacts, and maybe that's not possible, but that's what they could be aspiring to. and that being said, again, people have the right to smoke in my opinion, if they wish to, and i am not urging that tobacco be outlawed or we go into prohibition. that would just turn a huge percentage of our population into criminals, and with all negative things that it causes. that being said, i'm somebody who believes in voluntary exchange and people making choices, but at the same time, attempting to raise consciousness and educate people to make better choices for their own health and well-being. >> host: you are a ceo so you pend a lot of your time doing these things at alloff your whole food stores. what was is like to write a book? did you sit in bed at night with a laptop and eat snacks or
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devote time in your day? >> guest: i ate fast food when nobody was look, candy bars and -- >> host: smoking cigarettes. >> guest: i was a bad boy. i learned how to write a book. my co-author, this was his seventh book, and he really -- i'm actually excited. i think i have at least three more books in me and i'm already plotting them out. the first thing was he taught me how to -- we did a technology called mind mapping and we were able to take the ideas we wanted to put forthin the book and organize them in a brain-storming type fashion through software called mind mapping that helped us organize the overall book and we could add to it or subtract as we followed it long but that acted as kind of the big picture for the book. then when it cam to degree chapters we used dictation software, hooked up to our
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computers, and i would look at the mind map and basically just talk through the chapter. >> host: you talked your book? >> guest: i talked the book. the initial rough draft was all verbally spoken. this you don't have writer's block. now you have 5,000 words down in a chapter quickly, and you feel really good about it because you have the core. then you have to do research. you have to obviously edit it and polish it. the other person comes in and puts their input into it, since it was written by bows both of it injury. >> host: is it mostly your voice or his house. >> guest: we made couldn't shoes decision to mostly be my voice. but roger did more work on the book than i did. and he has a higher standard of what is acceptable as a writer than i am. so, we were a great team. irrealy enjoyed working with him economy. next book or two we're going to team up to do those as well. >> host: well, thank you so much for taking the time to do this. it was great to see you. >> great to see you,